First Trust lists a new active ETF on LSE

First Trust‘s new ETF applies an active buffer strategy on the S&P 500 Index with August 2024/2025 as the new target period.

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By ETFWorld.co.uk

Rupert Haddon Managing Director at First Trust Global Portfolios

The First Trust Vest U.S. Equity Moderate Buffer UCITS ETF – August pursues an active investment strategy with the objective of tracking the performance of the S&P 500 Index up to a fixed upper bound (cap).

At the same time, the fund aims to cover losses (buffer) for the first 15% price drops at the end of the defined target period of one calendar year. For this purpose, the investment manager invests the entire assets in FLEX options, which are put and call option contracts.

The buffer strategy begins and ends in August of each year and is then rebalanced by the fund investing in a new package of FLEX options. The cap is calculated at the first reporting date based on market conditions, while the buffer always remains unchanged at 15 per cent.

Source: ETFWorld